Rusal

UC Rusal's roots lie in the business activities of Russian businessman Oleg Deripaska, who entered the metals industry as a commodities agent and broker at the Moscow Trade Stock Exchange (Moskovskaya Tovarnaya Birzha (MTB)) and then at the Russian Commodities and Raw Materials Exchange (Rossiyskaya Tovarno-Syryevaya Birzha (RTSB)). As a broker, Deripaska dealt in a wide range of commodities, including aluminium. His work also included trading with major Russian aluminium smelters.[9]

Between 1991 and 1994, companies set up by Mr. Deripaska with the backing of industrialist and entrepreneur Michael Cherney, started investing in the shares of Sayanogorsk Aluminum Smelter (SAZ), one of the newest and most modern aluminium plants built in Soviet times (1980–1985).[10] In 1994, Mr. Deripaska was elected the General Director of SAZ.[11]

In 1997, the companies controlled by Deripaska underwent a general restructuring, leading to the creation of Sibirsky Aluminium to manage aluminium and alumina assets acquired by Deripaska's companies.[10] By 2000, Sibirsky Aluminium managed, among other aluminium-related assets, majority interests in the Sayanogorsk aluminium smelter, the Sayanal foil mill, a fabricating plant in Samara, Russia, and a minority interest in the Nikolaev alumina refinery in Ukraine.

Gradual strategic acquisitions and growth projects eventually led to the creation of one of the world's largest aluminium and alumina producers.[2] Rusal has historically opted to fully integrate its assets under centralized operational and management control. The company has achieved increased production and efficiency in most of its acquired facilities through production "creep" (improvements achieved through targeted improvements to key processes), as well as by undertaking key modernization and expansion projects.[12]

Rusal was founded in 2000 after Sibirsky Aluminium and Millhouse Capital, owned by Roman Abramovich, agreed to merge their aluminium and alumina assets.[13]

By 2002, Sibirsky Aluminium and Millhouse Capital were managing controlling stakes in the Armenal foil mill in Armenia and the Belaya Kalitva metallurgical plant and Novokuznetsk aluminium smelter in Russia, and also took under management the Friguia bauxite and alumina complex and Bauxite of Kindia Company in Guinea to secure bauxite and alumina supply for its Russian smelters. In 2002, Rusal also set up the Engineering and Technology Center in Krasnoyarsk, which is now the foundation of the company's internal R&D projects.

In 2003, Millhouse Capital sold its 50% stake in Rusal to Basic Element, which held the remaining half of the shares and belongs to Deripaska.[14] In Ukraine, RUSAL increased its share in the Nikolaev alumina refinery to 98%.

In 2004, Rusal made the strategic decision to focus on its upstream business and began disposing of its downstream assets, including the sale of its fabricating division to Alcoa in January 2005.[15] The divestiture process was largely completed in 2006 with the distribution of certain aluminium construction plants and other non-core assets to companies controlled by RUSAL's beneficial owner. In 2004, Rusal obtained a licence to develop bauxite mines in Guyana and the Bauxite Company of Guyana was subsequently founded.[16]

From 2004 to 2006, RUSAL acquired several strategically important assets around the globe. In 2004, RUSAL acquired a 90% interest in the Boxitogorsk alumina refinery in Russia and increased its holding in the Nikolaev alumina refinery to 100%.

In 2005, RUSAL bought a 50% stake in the Komi alumina project from SUAL and became its partner in the project, which involved the construction of an integrated bauxite and alumina complex in Russia's Komi Republic.[17]

Also in 2005, RUSAL completed the acquisition of a 20% equity interest in one of the world's largest alumina refineries in terms of production capacity, Queensland Alumina Limited, located in Queensland, Australia.[18]

Furthermore, RUSAL purchased assets of a cathode plant in Lingshi County of Shanxi Province, China.[19] In April 2008, the company acquired assets of another cathode plant in Taigu County of Shanxi Province, China, which have been integrated into the existing cathode plant in Lingshi.

In 2006, RUSAL acquired assets of the state-owned Aroaima Mining Company in Guyana,[20] acquired the remaining equity interest in the Friguia bauxite and alumina complex in Guinea, completed an extensive retrofit of the Armenal foil mill and commissioned the Khakas aluminium smelter in Russia, one of the most advanced aluminium production facilities in the world. RUSAL also acquired a 56.16% equity interest in the Sardinian alumina refinery, Eurallumina.[21]

In May 2006, RUSAL and RusHydro signed a co-operation agreement for the construction of the Boguchanskaya hydropower station (HPP) and the Boguchansky aluminium smelter. RUSAL increased ownership in the Bratsk, Krasnoyarsk, Sayanogorsk, and Novokuznetsk aluminium smelters, the Achinsk and Boksitogorsk alumina refineries and the Russian National Aluminium and Magnesium Institute (VAMI) to 100% in November 2006, and in Sayanal in June 2007.

In order to stay competitive, the VAMI and SibVAMI aluminium and magnesium research institutes became the backbone for engineering and technology centres involved in the development of new unique production technologies including RA-300 and RA-400 reduction cells for RUSAL. The new technologies allowed for large-scale greenfield and brownfield projects. In 2005, RUSAL created its own engineering and construction subsidiary, Rusal-Engineering Development Limited, responsible for modernization and construction projects.[22]

In December 2006, RUSAL acquired through a privatisation process a 77.5% equity interest in the Aluminium Smelter Company of Nigeria (ALSCON).[23][24] The Group acquired a further 7.5% equity interest in ALSCON from MAN Ferrostaal AG in January 2008.

In November 2007, RUSAL signed a cooperation agreement with Samruk-Energo, a subsidiary of Samruk-Kazyna, on the creation of a 50/50 joint venture to operate the Bogatyr Komir LLP, the largest coal mining company in Kazakhstan.

Because of a string of mergers and acquisitions, particularly that of Norilsk Nickel, UC Rusal had a high level of debt, which was exacerbated by the onset of the global financial crisis in 2008.[29] In order to be able to retain its stake in Norilsk Nickel, and to avoid having to float the stake to foreign lenders, UC Rusal received a $4.5 billion loan from Russian state bank VEB to repay debts to foreign creditors.[29] As part of its debt consolidation efforts in 2009, UC Rusal reduced the costs of its operations by 25%. In December 2009, a final agreement between the company and 72 Russian and international lenders to refinance $17 billion of debt were reached.[9][30]

In January 2009, Oleg Deripaska was appointed Rusal's CEO, replacing Alexander Bulygin, who had held the post for 3 years.[31]

In January 2010, UC RUSAL was listed on the Hong Kong Stock Exchange with its IPO price of HK$10.8 per share and capital raising of US$2.2 billion.[32] The IPO attracted investors such as Nathaniel Rothschild, Robert Kuok, Paulson & Co, John Paulson and Vneshekonombank.[33][34] Rusal also trades global depository receipts on the NYSE Euronext in Paris.[35]

August 2011 saw Rusal reach an agreement with Sberbank to extend the maturity of debts until 2016, thereby cancelling VEB's loan used to repay debts to lenders.[36]

In October 2011, UC Rusal announced that it had completed all debt refinancing of outstanding payments worth $11.4 billion.[37] As a result, the company was freed from all investment and dividend payment restrictions, and announced new investments into the modernisation of old smelters and construction of new smelters in Siberia.[38]

With Chinese aluminium demand growing due to rapid urbanization and industrialization, UC Rusal signed a joint venture agreement with China North Industries Corporation (NORINCO) in April 2012.[39] Rusal also signed a memorandum of understanding with one of its main competitors, Shandong Xinfa Group, pertaining to the study of future potential cooperation areas, such as joint ventures.[40]

March 2014 saw UC Rusal enter into a 50/50 share joint venture with Israeli automotive component manufacturer Omen High Pressure Die Casting to produce automotive components.[41]

Resulting from massive overcapacity in the aluminium market due to China increasing its output of primary aluminium, global aluminium prices fell in the years 2007 to 2013,[42] leading Rusal to report a loss of US$3.2bn in 2014.[43] The company asked creditors to agree to delay payments on part of its US$10bn net debt pile.[44] In August that year, national and international lenders agreed to allow the restructuring of its debt.[45]

In November 2014, Vladislav Solovyov was appointed as Rusal's CEO, while Deripaska assumed the role of company president.[46]

In 2016, UC Rusal signed another joint venture agreement with a Chinese firm, Hebei Joy Sense Cable Co. (HJSC), to produce aluminium cable for electrical applications.[47]

In 2017, Rusal issued two Eurobonds to finance its debts. The first one, worth US$600 million, was issued in February,[48] followed by a second one in April, worth US$500 million.[49] Also in February, plans were announced to sell 10 billion yuan worth of seven-year onshore bonds to finance purchases in China, making Rusal the first foreign company to offer panda bonds on the Shanghai Stock Exchange.[50] The company also agreed on a pre-export finance mechanism with international lenders worth US$1.7 billion for debt refinancing.[51]

In April 2017, Rusal signed a joint venture with Indian firm Runaya Metsource for producing aluminum paste and powder, with commercial activities set to commence in 2018.[52] In 2021, the company's revenue amounted to 596 billion rubles[53].

In April 2022, Rusal America Corporation was sold to former executives Brian Hesse and Andrey Donets and subsequently renamed PerenniAL.

In October 2023, Rusal acquired a 30% stake in China's Hebei Wenfeng New Materials (HWNM) for 1.91 billion yuan ($261.6 million).[54]

As of the end of 2020, UC Rusal owned 9 aluminium smelters, 9 alumina refineries, 7 bauxite mines worldwide, and 4 domestic foil rolling mills.

Rusal owns and operates eight aluminium smelters, four alumina refineries and three foil rolling mills in Russia:

• Bratsk Aluminium Smelter, Bratsk
• Irkutsk Aluminium Smelter, Shelekhov
• Krasnoyarsk Aluminium Smelter, Krasnoyarsk
• Kandalaksha Aluminium Smelter
• Novokuznetsk Aluminium Smelter, Novokuznetsk
• Nadvoitsy Aluminium Smelter
• Sayanogorsk Aluminium Smelter, Sayanogorsk
• Khakas Aluminium Smelter, Sayanogorsk
• Volgograd Aluminium Smelter
• Urals Aluminium Smelter
• Boguchany Aluminium Smelter
• Bogoslovsk Aluminium Smelter

• KUBAL – Kubal is one of the largest industrial facilities in Central Sweden and the only primary aluminium producer in the country.

• Aluminium Smelter Company of Nigeria (ALSCON) – Smelter in Akwa Ibom state of Nigeria

• Achinsk Aluminium Refinery
• Boksitgorsk
• Bogoslovsk
• Urals

• Friguia Aluminium Refinery

• Queensland Alumina Limited – minority ownership

• Eurallumina Alumina Refinery

• Rusal Aughinish, Europe's largest bauxite refinery.[59]

• Windalco

• Nikolaev Alumina Refinery

• Timan
• North Urals
• Sevuralboksitruda

• Compagnie des Bauxites de Kindia
• Friguia Bauxite and Alumina Complex
• Dian-Dian Project

• Bauxite Company of Guyana

• Sayanal
• Ural Foil
• Armenal
• Sayanskaya Folga

• UC Rusal – RusHydro, 2005[60]
• UC Rusal – China North Industries Corporation (NORINCO), April 2012[39]
• UC Rusal – Omen High Pressure Die Casting, March 2014[41]
• UC Rusal – Hebei Joy Sense Cable Co. (HJSC), July 2016[47]
• UC Rusal – Runaya Metsource, April 2017[52]
• UC Rusal – SKAD, April 2017[61]
• UC Rusal - Braidy Industries Inc., April 2019[62]

Following the 2011 Toho earthquake and tsunami, UC Rusal donated $600,000 to Japanese children's and cultural heritage foundations.[75] These included the Ashinaga Foundation providing financial and educational support to children; the Yul Foundation supporting the learning process and psychological rehabilitation of pupils; and donations to the Ishinomori Mangattan Museum in Miyagi Prefecture for the city's reconstruction of cultural attractions.[75]

In 2012, Rusal donated 25 tonnes of medical supplies to Sierra Leone to control the outbreak of cholera in the country as part of its commitment to corporate social responsibility.[76][77]

In 2013, Rusal, in cooperation with Alscon, commissioned the construction of 14 fresh water facilities in Nigeria so as to provide potable water to more than 10,000 people in the Ikot Abasi region.[78]

During the 2014 Ebola outbreak in West Africa, UC Rusal provided logistical support to the international relief efforts. In 2015, the company invested $10 million to build the "Centre for epidemic and microbiological research and treatment" in Guinea to fight the spread of the virus.[79] It also donated medication, as well as sanitary equipment to the Guinean Health Ministry, and was involved in setting up a mobile hospital containing 200 beds.[79] Field trials for a Russian Ebola vaccine were carried out at the centre, and the vaccine was officially launched in August 2017 in Kindia, where the centre is located.[80][81]